8-K: OpGen Inc. Announces Change in Independent Auditor

OpGen, Inc. has announced the resignation of UHY LLP as its independent auditor and the engagement of Beckles & Co. as its new auditor, effective April 23, 2024.

Summary

• OpGen, Inc. reported that UHY LLP resigned as their independent public accounting firm on April 22, 2024.
• UHY's engagement commenced in March 2023, and they did not issue any reports on the company's financial statements during their tenure.
• There were no disagreements between OpGen and UHY regarding accounting principles, financial disclosures, or auditing procedures.
• OpGen engaged Beckles & Co. as their new independent registered public accounting firm on April 23, 2024, for the fiscal year ending December 31, 2023, and the upcoming interim period.
• The appointment of Beckles was approved by OpGen's board of directors.
• OpGen did not consult with Beckles on any accounting or auditing issues prior to their engagement.

Sentiment

Score: 4

Explanation: The change in auditors, especially with no prior reports issued by the previous firm, introduces uncertainty and potential risks, leading to a somewhat negative sentiment.

Positives

• The transition to a new auditor was completed quickly, with Beckles & Co. engaged the day after UHY's resignation.
• There were no disagreements reported between OpGen and UHY, suggesting a smooth relationship prior to the resignation.

Negatives

• The resignation of UHY LLP as the independent auditor may raise concerns about the company's financial reporting process.
• UHY did not provide any reports on the financial statements during their engagement, which could be a concern for investors.

Risks

• The change in auditors could lead to increased scrutiny of OpGen's financial statements.
• The lack of prior reports from UHY may raise questions about the company's financial health and reporting practices.
• The new auditor, Beckles & Co., will need time to familiarize themselves with OpGen's financials, which could potentially delay future filings.

Future Outlook

The company will be working with Beckles & Co. for the fiscal year ending December 31, 2023, and the upcoming interim period.

Management Comments

• David Lazar, Chairman and Chief Executive Officer, signed the report on behalf of OpGen, Inc.

Industry Context

Changes in auditors are not uncommon, but they can sometimes signal underlying issues or a desire for a fresh perspective on a company's financials. This change will be closely watched by investors and analysts.

Comparison to Industry Standards

• The change of auditors is not unusual, but the lack of any reports from the previous auditor, UHY, is unusual and may raise concerns.
• Most companies have an audit report issued annually, so the lack of any report from UHY is a significant deviation from industry standards.
• The speed of the change, with a new auditor engaged the day after the resignation, is relatively quick, which may indicate a proactive approach by the company.

Stakeholder Impact

• Shareholders may be concerned about the change in auditors and the lack of prior reports from UHY.
• Employees may experience some uncertainty during the transition to a new auditor.
• Creditors may scrutinize the company's financials more closely due to the auditor change.

Next Steps

• Beckles & Co. will begin their audit of OpGen's financial statements for the fiscal year ending December 31, 2023.
• OpGen will likely need to work closely with Beckles & Co. to ensure a smooth transition and timely completion of the audit.

Key Dates

Keywords

auditor, accounting, financial statements, UHY LLP, Beckles & Co., resignation, engagement, SEC, independent auditor